The Yorkshire businessman teamed up with the Referendum Movement, the successor to Sir James' Referendum party, yesterday as he unveiled Britain's largest-ever anti-federalist group.
As The Independent disclosed last month, the Democracy Movement will be non-party-political, and will aim to educate the public of the dangers of replacing the pound with the euro.
Senior Tory Eurosceptics will mount a major offensive against the pro- Europeans Michael Heseltine and Ken Clarke at next month's party conference.
Former party chairman, Lord Tebbitt, will be joined by Shadow Trade and Industry Secretary, John Redwood, and former Chancellor, Lord Lamont, at the biggest fringe meeting of the Bournmouth conference.
The meeting of Conservatives Against A Federal Europe will act as a focus for opposition to the pro-Europe Conservative mainstream events organised by Mr Heseltine.
Mr Sykes revealed that he personally will put in half of the pounds 40m funds for the Democracy Movement and that the remainder will come from Sir James' family and other private donors. The public had pounds 450,000 already, he said.
"We are not going to be short of money," Mr Sykes said. "I am not giving in now. I know we are right on this; I will not be backing off."
Mr Sykes will be chairman and chief spokesman, and Robin Birley, current Referendum Movement head, will be vice-chairman and campaign chief.
Its nationwide publicity campaign will be backed by a specially-formed expert panel, including advisors from every nation of the EU and the US.
The new group will not have a membership, but people will be invited to register as supporters to receive regular communications and become involved in campaigning.
Mr Sykes said he had always had a "dialogue" with the Referendum Movement, and had spoken in the past to Sir James Goldsmith.
"The new movement rapidly starting to come together when I realised we needed grassroots activists throughout the nation and we've only got so much time. We met, and very quickly put things together.
"Between us we could become surely the most serious opposition to Economic and Monetary Union," he said.
The movement plans co-ordinated Democracy Days from January 1 1999, when the euro becomes a reality for 11 EU member states. Polling is also planned and information will be put on the Internet.
Mr Sykes said that he would be targeting trade union members in the campaign to keep the pound.
"Because we are non-party-political, one of the main areas I intend to concentrate on is that of the union movement.
"Those are the people who are going to get cut up in this thing, not big business," said Mr Sykes.